Who Will Inherit Whitney Houston's Fortune Following Bobbi Kristina's Death — and What Are the Lessons?

Who Will Inherit Whitney Houston's Fortune Following Bobbi Kristina's Death — and What Are the Lessons?2015-08-052015-08-05http://forrestallaw2.wpengine.com/wp-content/uploads/2015/08/logo.pngThe Forrestal Law Office Co., L.P.A.http://forrestallaw2.wpengine.com/wp-content/uploads/2015/08/logo.png200px200px

Nearly two decades before her death in 2012, singer Whitney Houston executed a will specifying how her assets would be distributed to any children she might have. That 1993 will provided for a trust that would eventually parcel out her estate to her only child, Bobbi Kristina Brown, starting at age 21.

Bobbi Kristina was found unconscious in her bathtub on January 31, 2015. She remained in a medically-induced coma until her death nearly seven months later on July 26, at age 22.

Now that Bobbi Kristina has herself died, what will happen to the estimated $20 million estate she was to inherit? Is Houston’s ex-husband and Bobbi Kristina’s father, Bobby Brown, entitled to a share? What about Bobbi Kristina’s partner at the time of her death, Nick Gordon, who is being sued by Bobbi Kristina’s conservator for allegedly beating her up on the day she was found unconscious and for allegedly stealing thousands from her bank account? Finally, could Whitney Houston have done more to protect her daughter and are there lessons here for those with considerably fewer assets to pass on?

When she turned 21, Bobbi Kristina received 10 percent of Houston’s estate, or reportedly about $2 million. Had she lived, at age 25 she would have received another one-sixth of the estate (roughly $3 million), and she would have had full access to the money at age 30.

“Everyone is going to try to grab [Houston’s money], but it’s not necessarily up for grabs,” trusts and estates lawyer Jerry Reisman told USA Today. “And it’s a lot of money. Don’t forget the royalties coming in [from Houston’s music]. That estate is never going to end.”

Two Parts to the Puzzle

To answer the question “Who gets the money?” the estate must be viewed in two parts – the part that Bobbi Kristina had already received prior to her death and the part she did not live to inherit. Unless Bobbi Kristina had a will herself, the money she already received from her late mother will go to her next-of-kin, who is most likely her father, Bobby Brown. Nick Gordon and Bobbi Kristina reportedly called each other husband and wife, but unless Gordon can prove that the two were actually married, he has no claim. If he presses his case nonetheless, he could receive a settlement. But if a court finds him to have had a role in causing Bobbi Kristina’s death, he would not be able to inherit under most state laws.

As for the estimated $18 million of the Houston estate that Bobbi Kristina did not live to enjoy, Whitney Houston’s will provided that if her daughter died unmarried and without children of her own and without a will, the remainder of the estate would go to Houston’s two brothers and to her mother, Cissy Houston. Bobby Brown would likely not be entitled to any portion of this part of the estate, even though he is listed as a beneficiary in the will, because Houston’s will refers to him as “my husband, Robert B. Brown.” Houston and Brown divorced in 2007, so he appears to no longer meet the necessary requirement of being her husband.

The current size of the Houston estate is in doubt, however. Keeping Bobbi Kristina on life support for the last nearly seven months was hugely expensive and it is unknown how much of this cost, if any, was covered by health insurance.

How Good Was Whitney Houston’s Estate Planning?

Some have suggested that Whitney Houston’s estate planning could have been better. Houston’s will set up what is known as a “testamentary trust” for her daughter. This is a trust created by a will, meaning that it does not avoid the need for probate and it becomes a public document. Houston could have accomplished the same goals through a “living trust,” which would have kept the provisions of the trust private because it would pass outside of probate.

Also, Houston was relying on a will that was created in 1993, when she was married to Bobby Brown, and – except for a change in 2000 to who could serve as trustees — it was never updated, even after she and Brown divorced, Bobbi Kristina was born, started to grow, and Houston could better gauge whether her daughter could responsibly handle the money.

As it turned out, Houston may have given Bobbi Kristina more money than she could cope with at such a young age. The trustees of the trust – Bobbi’s aunt and grandmother – certainly thought so because they filed court papers to change the will to delay the windfall to Bobbi Kristina, but the trustees later withdrew the request, no doubt realizing that courts invariably follow the terms of a will. But we’ve seen worse. At least Houston did have a plan that didn’t give everything to Bobbi, even though $2 million at age 21 was probably too much.

The morals of the story are to update your estate plan when life changes happen and to think long and hard about what effect inherited money will have on a child and on those close to her. As the Probate Lawyer Blog puts it in an article on the Houston estate, “Even $50,000 in the hands of a 21-year-old can be problematic.”

To update your existing estate plan or to create one that works for you and your family, contact your attorney today.